Redundancy Payments Bill, 1970: Report and Final Stages.

Amendments Nos. 1 and 7 are related and may be taken together.

Government amendment No. 1:
In page 4, between lines 12 and 13, to insert the following new subsection:
"(2) In relation to the amendments of the Principal Act referred to in section 19 (†), the Minister may, in respect of a dismissal or a termination of employment in the period beginning on the 22nd day of January, 1971 and ending on the commencement of this section and notwithstanding the Principal Act, pay to an employee out of the Redundancy Fund any moneys to which the employee may become entitled by virtue of the said section 19 (†).".
†This is the subsection proposed to be inserted by amendment 7.

When this Bill was introduced in the Dáil and again in the Seanad, against much pleadings and demands and amendments I stood out against any form of retrospection. However, I did give an undertaking to have a look at what might be possible both at Committee Stage and Report Stage. Having examined in detail the question of retrospection, I must confess that the delay in regard to the Bill, since it was introduced in January does provide a reason for some retrospection. On examination I find that to have complete retrospection would not be practicable or desirable or, indeed, be financially possible on an actuarial assessment of the fund.

I decided to make some concession towards those people who have been anxious to have retrospection and to have some of the benefits of the amending Bill made retrospective to the date on which the Bill was published for circulation. That is what amendments Nos. 1 and 7 are about. It does make very important concessions which will cost the fund about £250,000 or more. The particular provisions which it is proposed will apply retrospectively are specified in amendment No. 7. The first one provides for the extension of cover of the legislation to non-manual workers dismissed by reason of redundancy since 22nd January and who have exceeded their remuneration limit for insurability for all benefits under the Social Welfare Acts between two and four years. In the amending Bill we provide that when a person goes over the insurable limits he is still held to be eligible for redundancy for four years. The old legislation specified two in that case so that the benefit of the four years over the insurable limit will be given retrospectively to 22nd January, the day on which the Bill was first circulated. That is one of the provisions of this amendment.

The second provision is that whereby each year of continuous employment over the age of 41 years will count for two weekly payments instead of as in the provision in the 1967 Act under which two years over 41 counted for three weekly payments. It will mean that some workers who have already exhausted their weekly payments for entitlement under the 1967 Act will become entitled to further payments. In the Principal Act two years' service was reckoned for three years' payment. In the amending Bill before us each year's service counts for two, and this benefit will be made retrospective to 22nd January.

The third provision will also benefit long service workers. This is the one which relates to the improved reckonable service, each year being counted two instead of the previous two years being counted three and is entirely to benefit long service workers. Those over 41 years are the people who will benefit. That is my thinking in bringing in that amendment. The third provision will also benefit long service workers. The effect of this will be that workers dismissed as redundant since 26th January last whose lump sums were affected by the 20 weeks pay ceiling will be entitled to lump sums from the fund based on their total service. That is quite understandable. There was a ceiling of 20 years in the Principal Act. In the amending Bill the total period is reckonable so that only those who have long service will benefit under it. That is entirely calculated to benefit those with a long record of service.

These are the three things covered in the redundancy legislation. The fact that the Bill has taken so long to get through and that it will be some time yet before it becomes law makes it difficult to argue that some measure of retrospection could not be given. I am totally opposed to the idea of retrospection and I hope that the granting of these things will not be taken as a precedent. I know it will be argued by Senators that some of the principal benefits in the amending legislation are not being made retrospective.

I mentioned a number of reasons why I did not like retrospection. One of the reasons which I did not mention is the practicability of doing it in the Department; the almost impossible task of going back over cases. For that reason the required two years' continuous service, instead of four as in the past, is not retrospective. That would impose a strain on the Department which it would not be easy to cope with, if it were possible at all. I wish to point out that the improved benefits which this amendment will bring as from 22nd January impose a very great strain in the examination of a great many claims in the Department. Coming into effect at the same time as the new legislation will make it impossible for the personnel in the Department to deal with them immediately. Therefore I hope that Senators will understand if people are not paid these benefits right away. It will take some time to examine several thousand claims and arrange for payment of them. The job will be done as quickly as possible.

I am sure the House will welcome that measure of retrospection which is the most I could possibly concede in the case. It was granted as a result of the different parties making representations for some measure of retrospection. I think it will go a good part of the way to meet their demands.

I welcome this amendment. We should record our thanks to the Minister for having made a very generous effort to meet the desires of the members of this party on the question of retrospection. As Senators are aware, on Committee Stage we had a considerable number of amendments tabled to this Bill, all geared towards gaining some retrospection. I was pleasantly surprised when I saw the Minister, after a rather long, hard battle through both Houses, eventually come around to partly seeing our point of view on it. I welcome the amendment and thank the Minister for introducing it.

Amendment agreed to.
Government amendment No. 2.
In page 5, to delete lines 13 to 35 and substitute the following new section:
12. (1) Section 24 of the Principal Act is hereby amended by the insertion at the end of that section of the following subsection:
(2) Notwithstanding any provision of this Act, an employee shall not be entitled to a weekly payment unless he has become entitled to a lump sum.
(2) In respect of a dismissal or a termination of employment which occurs not earlier than 30 weeks before the commencement of this section, section 24 of the Principal Act shall apply as if—
(a) "52 weeks" were substituted for "thirty weeks", and
(b) the following subsection were inserted after subsection (2) (inserted by this section):
(2A) Where an employee who fails to make a claim for a lump sum within the period of 52 weeks mentioned in subsection (1) (as amended) makes such a claim before the end of the period of 104 weeks beginning on the date of dismissal or the date of termination of employment, the Tribunal, if it is satisfied that the employee would have been entitled to the lump sum and that the failure was due to a reasonable cause, may declare the employee to be entitled to the lump sum and the employee shall thereupon become so entitled.

This is an amendment which I promised on Committee Stage to bring in, to extend the time limit for making weekly payments, including that section 12 of the Bill would be worded so as not to allow the revival of cases already rejected. This amendment provides accordingly.

Specifically, the amended power will enable the extended time limits to be applied only to redundancies which occurred within 30 weeks preceding the commencement of the amending legislation. Persons dismissed in that period would, under section 24 of the Principal Act, be within the time limit for making claims for redundancy payments. The qualification proposed in the amendment will enable a person already excluded from claiming under the 1967 Act from re-opening his case. This is a transitional arrangement and as time goes on the extended time limit will be applicable generally.

I might mention that it is necessary to re-introduce section 24 of the 1967 Act which it had been intended to replace by section 12 of this Bill. That is to cover cases of persons to whom the new time limit provisions will not apply. Section 24 will not be reintroduced. There will be no time limit at all on claims made by persons dismissed in, say, 1969 or 1970. This would not be acceptable for obvious reasons. I pointed out on Committee Stage that I was bringing in this amendment.

Amendment agreed to.

I move amendment No. 3:

In page 5, lines 44 and 49, to delete "55" and substitute "60".

Amendments Nos. 3 and 4 are related and if the House agrees they may be taken together.

The purpose of these amendments is quite clear: it is to increase the rebate payable to employers from 35 per cent, as set out in section 13, subsections (a) and (b) of the Act, to 60 per cent. I think the amendment is reasonable. Having regard to the extension in time and otherwise that the Minister has given to the employee, it would be a fairquid pro quo if the employer in this case was given a larger rebate than that set out in the Act. I would appeal to the Minister to accept this in the spirit in which he has put down his own amendment. It would make for better and more co-operative working generally of the redundancy scheme.

I am afraid I cannot, for the same reasons that I gave on Committee Stage, accept these amendments. They are seeking to improve the amount of rebate which an employer may get when he pays the lump sum to an employee. One of the important things in the legislation is that it has been conceded from the start that the employer must be committed to paying something out of his own pocket if this legislation is to be undertaken seriously by the employer and reasonably administered. We should ensure that the employer is at some cost to himself in order to meet the lump sums payable. If no cost to the employer at all was involved or if one was to lessen the amount, one would be eroding the assurance which the amount he pays tends to bring. I should like to point out that Northern Ireland and British legislation, which is cited so often here as an example in redundancy legislation, have only a straight 50 per cent. They have no bonus for earlier notification. We have the 50 per cent rebate and we have a bonus for earlier notification of redundancy, which we consider very essential, and it can go up to 65 per cent. Any employer who is conscious of his obligations, as well as of his position regarding his employees, will ensure that he gets the maximum. For that reason I regret I could not accept these two amendments.

I accept what the Minister has said. I should in no way like to subscribe to the theory that the employer should be relieved to any substantial degree of the responsibility of paying into the redundancy scheme. In regard to the second amendment, there is the question, in addition to the increased rebate, of increased notice to the employee. I spoke on this point at some length on Committee Stage when I suggested that it would be in the interests of the employee, and would save the Minister's placement scheme some expense and trouble, if employers were encouraged to give the maximum amount of notice to their employees where the closure of all or part of their business or industry was threatened. For that reason I felt that the Minister would be assisting his Department, as well as assisting the employee and employer, if the employer could be encouraged to give the maximum amount of notice. We have had instances, as I mentioned on Committee Stage, where industries closed down at short notice and considerable difficulty was experienced in replacing a number of the employees. If longer notice had been given in those cases it would have made the task of obtaining alternative employment easier. The second amendment was put down with a view to encouraging the employer to give an extended period of notice.

Amendment, by leave, withdrawn.
Amendment No. 4 not moved.

I move amendment No. 5:

In page 6, between lines 16 and 17, to insert the following:

"(3) Where the Minister is satisfied that failure by an employer to give him copy of a notice under subsection (2) of this section was due to reasonable cause the Minister may allow all or part of the increased rebates provided in subsection (2) of this section."

I got the impression on Committee Stage, perhaps wrongly, that the Minister was sympathetic to a particular case that was quoted in the first instance by Senator Dooge and subsequently by myself in regard to this amendment. As the Bill stands, if an employer fails to give notice to the Minister's Department or fails to send him a copy of the dismissal notice, he loses the opportunity of getting the extra rebate up to 65 per cent. In the instance quoted there may have been very good reasons why the employer failed to send the Department of Labour a copy of the notice. Among the instances quoted was one where the man concerned might have had a fatal injury or due to advancing years his memory might have slipped him and therefore he failed to send in a copy of the notice. I think the Minister should take power himself to adjudicate on a case of extreme hardship where reasonable cause can be shown why the employer had not sent a copy of the notice to the Department.

I do not want to reiterate the case all over again but it was the case of a small builder—a man who was getting on in years—who had actually obtained alternative employment for all his employees but subsequently forgot to send in a copy of the dismissal notice to the Minister's Department and because of his failure to do so he lost the extra 15 per cent. There was some confusion on Committee Stage as to whether or not he had got the 15 per cent but as the Minister pointed out, quite rightly, he was in any event entitled to the 50 per cent. He was a man in very poor circumstances—his business had been losing money for some years. In order to pay his creditors in full it was necessary for him to get together every sum of money he could lay his hands on and the 15 per cent would have made a substantial difference to him.

The cases in which this is likely to arise are very few. The Minister ought to take power to give, in a case of real hardship where reasonable cause can be shown, the extra 15 per cent to the employer concerned, particularly if he is a good employer who had stood by his employees and shown his appreciation of their loyalty and service over the years.

As I said on Committee Stage when Senator Dooge was quoting that case of a rather exemplary employer who had done everything possible for his workers but had forgotten to give notice to my Department about impending redundancies and thereby received only 50 per cent of the rebate—Senator Dooge was of opinion that he had got no rebate— one would be forced to have sympathy with such an employer because one likes to encourage an employer who will try to place his workers. However, it is difficult to conceive of an employer who would attend to all those things and neglect the all-important and obvious thing of giving due notice. If I were to accept that I would be legislating for a rather exceptional type of case and at the same time I would be leaving it open for every person who wilfully neglected to give notice to make a claim that he had good reasons for not doing so. For that reason alone I would be completely opposed to the acceptance of this amendment.

The type of case which the Senator proposing the amendment has in mind is one which is hardly likely to arise and one which is a complete exception. By legislating for the possibility of that type of case arising one would be leaving it open for all other types of delinquents to make the case that they had a good reason for not giving the required notice and one would be facilitating the transgressors rather than the genuine employers who failed, for some good reason, to give the notice. For that reason the amendment is not acceptable.

I should like to point out that as time goes on—and this legislation is in force since the Principal Act was enacted—employers become more and more familiar with the requirements of the legislation. They know that there is a prescribed form available on which they can record all the different requirements of the Act such as notification and so on. It is purely a matter of their obtaining one of these forms and filling it up.

I am sorry the Minister has not seen fit to accept this amendment. I take his point about transgressors. However, he seems to be more concerned with avoiding transgression in this instance than in seeing that justice is done. Frankly, I find it impossible to believe that the experts in his Department could not phrase an amendment in such a way that transgressors could almost entirely be excluded and whereby good employers, who had failed through no fault of their own to send a copy of the notice to the Department, could be safeguarded. I feel that the Minister has a certain sympathy in this case, but he is afraid to open the door to possible breakers of the regulations, that is, people who would take advantage of the provision. He should not be cowardly on that account, and I ask him to have another look at this. At this stage that is probably all he could do. There is a genuine case here. I should favour the one just man: we are too concerned about the others who might take advantage of a new section

Amendment, by leave, withdrawn.

I move amendment No. 6:

In page 6, between lines 38 and 39, to insert the following new section:—

"( )—(1) The Minister may by regulations make provision for excluding the right to a redundancy payment or reducing the amount of any redundancy payment, in such cases as may be prescribed by the regulations, being cases in which an employee has a right or claim (whether legally enforceable or not) to a periodical payment or lump sum by way of pension, gratuity or superannuation allowance which is to be paid by reference to his employment by a particular employer and is to be paid, or to begin to be paid, at the time when he leaves that employment or within such period thereafter as may be prescribed by the regulations.

(2) Such reduction as stated in subsection (1) above shall only apply to that portion of the lump sum by way of pension, gratuity or superannuation allowance which has been purchased by the employer."

This is an amendment which confirms what I said on the Committee Stage of the Bill. It is an integral part of the British Act and I have no hesitation in quoting the British Act, because I agree with Senator Mullins's point of view: if the British do things which we think are good, there is no reason why we should not learn from them, or from any other country. In the British Act there is a difference. I made a mistake in sending out my first amendment, by quoting almost verbatim from the British Act, which allows the entire contribution for a pension fund to be set up against a redundancy payment. This amendment seeks only in certain circumstances that it be permissive. It does not say that the Minister "shall", it says the Minister "may". It seeks to set off, in certain circumstances, the payments purchased by the employer, or that part of a pension scheme purchased by the employer, against redundancy payments. There are certain situations that I have in mind. Some Senators may remember that this was discussed at length on Committee Stage and there appeared to have been a little bit of confusion. Eventually, I admitted that nobody seemed to know what I was talking about, except myself, which was probably a good thing. I quoted some instances, and perhaps I would be allowed to repeat them very briefly.

In a factory, or in any other type of business where there was redundancy, if an employee became redundant on the same date on which he was entitled to a retiring pension, or shortly afterwards, a case could be made that he had retired in a redundancy situation. If he retired due to redundancy, say, two days before his pension became due, he would be clearly entitled to a redundancy payment. If the employer so wished, he would also receive his pension. If it was the practice of the firm in question to keep on key employees for one, two or three years, after they had reached retiring age, in accordance with the pension scheme, say, 65 years, and if this man retired at the age of 65 or a week or two afterwards, a case could be made that, if there was not redundancy, he would have been kept on. Therefore, a situation could arise in three different instances, where an employee would be entitled to a redundancy payment for the reasons I have set out, and also the employer would have covered him for a pension scheme. In most cases, perhaps in 99 per cent of cases, the employer would make the pension payment or lump sum payment, or both, to the employee. However, there might be a situation where the employer, for a very good reason, might not wish to do that, but might wish to set off the pension scheme entitlement against that of the redundancy scheme, and could appeal to the Minister in that regard. This amendment seeks to give the Minister the right to make a regulation providing for the employer to set off the pension payment against a redundancy payment.

I hope I have made myself clear. It is an integral part of the British redundancy scheme. This amendment does not go as far as the British scheme: it seeks only to give the employer a right, if the Minister should so decide, to set off the portion of the pension scheme that he has purchased by the premiums that he has paid on behalf of his employee.

Many references have been made to British legislation and it is suggested that we should follow the pattern of British legislation where it is good. Unfortunately, in some of the cases mentioned here today, we appear to be following the bad as well as the good. This is an example of it. I do not think that Senator Russell and Senator Alexis FitzGerald can be serious when they would expect any representative of the Labour Party to agree to any interference with or reduction in redundancy payments, because pensions, gratuities, or superannuation allowances are to be paid. I could not support this amendment and I should have to oppose it.

The last speaker made it rather easy for me, because this was the line I should have to take. Recently I was at a function where we launched a publication on the report prepared by the Institute of Public Administration, Professor Kaim-Caudle and others, setting out the advantages of occupational pensions, and I spoke, eloquently I hope, in favour of that type of pension. I should not like to see the rights of a worker under any scheme become confused with those under a State scheme, or other legislation that one would be offset against the other. These pensions should continue as part of the security and benefit which the worker has earned, and should not at any time be offset by any State legislation, or, indeed, by a State pension. It may be possible for a person to qualify for a pension under his insurance contributions, and to qualify for an occupational pension, as arranged by the firm or company for which he is working. The same principle should apply here, although there is provision in the Principal Act for offsetting a pension, if agreed between the employer and employee. That should be sufficient to meet Senator Russell's amendment I do not think it has been used much, if at all, but I should be opposed to making it compulsory, or to legislating to give effect to the setting off of pension rights against other rights to which a person is entitled. One of the things which workers might rightly look forward to from a good employer is an occupational pension scheme, which I should hope would stand on its own and not in any way be confused with State legislation that makes other provision for the workers in question. For that reason I could not accept it.

It is hardly likely to succeed, if it is opposed by the Minister and by the Labour Party. I should like to bring out a point which I did not make clear at Committee Stage; it is that I believe profoundly in pension schemes. I have been associated with them for more than 25 years. There may be in existing legislation a discouragement to employers to continue voluntary pension schemes. I am thinking principally of non-contributory pension schemes because they are becoming more general than joint contributory ones.

I did not read all of the Minister's eloquent speech but I read some of it. He gave the impression that he, as Minister, would like to see every encouragement given to employers to introduce pension schemes. I feel that this Bill may discourage employers because they may say: "Look, there is a redundancy scheme. There is not the same need to have a pension scheme." I should like to give the employers every possible encouragement to introduce pension schemes. It is for this reason, not for the purpose of cutting down any entitlement to which, under State legislation the employee might be entitled, that I introduced the amendment. However, I take the Minister's point in that regard.

Having seen how the Bill is operating and having seen its possible reaction on pension schemes the Minister might examine the whole question.

Amendment agreed to.
Government amendment No. 7:
In page 9, between lines 41 and 42, to insert the following new subsection:
(2) Notwithstanding section 20 (3), this section, in so far as it relates to the first amendment of section 4 of the Principal Act, the first amendment of section 7 of that Act, the fifth amendment of Schedule 1 of that Act and the fourth amendment of Schedule 3 of that Act, shall be deemed to have come into operation on the 22nd day of January, 1971.
Amendment agreed to.
Government amendment No. 8:
In page 13, after the ninth amendment of Schedule 3, to insert the following:
The insertion after paragraph 5 of the following:
(5A) If an employee is dismissed by reason of redundancy before attaining the period of 104 weeks referred to in section 7 (5) (as amended) of the Principal Act and resumes employment with the same employer within 26 weeks, his employment shall be taken to be continuous.

When Senator Owens was looking for a longer period than 26 weeks I undertook to bring in an amendment, but I would not be prepared to go as far as she wanted me to go. The 26 weeks has been used throughout the Bill as the period of notice. It is a reasonable period for the purpose of this amendment. The amendment is self-explanatory. It arises out of a similar amendment which was put down on Committee Stage. I hope that the House are satisfied that having gone as far as that proposed amendment on Committee Stage I have gone part of the way to meeting the point raised.

I welcome this amendment. As the Minister points out, it is in line with a similar amendment I put down on Committee Stage. but which as he explained, went a good deal further. However, as the Minister has moved somewhat in that direction, I welcome the amendment and thank the Minister for introducing it.

Amendment agreed to.
Bill received for final consideration.
Question proposed: "That the Bill do now pass."

On the Committee Stage, Senator Farrell introduced an amendment, which was duly hammered by the Minister, the purposes of which were to extend the Bill.

The Senator should speak on what is in the Bill and not what was proposed to be in it.

That matter makes me rather silent. Is there any possibility at this stage that the Minister could make provision to extend the benefits of the Bill beyond the age of 70 years? Could I ask that question in the particular circumstances? Is the legislation absolutely finished now? Can no further consideration be given to the point raised by Senator Farrell, a point which was subsequently brought home to me by a very sad case of a person who had worked up to the age of 73 years and had looked forward to redundancy payment but now cannot get it?

Acting Chairman

It is only what is in the Bill and not what the Senator would have liked to have seen in it that can be discussed.

All I can say is that I should have liked to have seen it in the Bill.

I should like to thank the House for the speedy passage of the Bill and the careful screening it has got. I know it was a difficult Bill from a technical viewpoint and not everybody was familiar with all the little details throughout the various sections, subsections and amendments to the Principal Act. Every Senator is conscious of the principal provisions of the Bill which can be summarised under three main headings: to make better weekly payments, to provide better lump sums and to make it easier to qualify by reducing the qualifying period from four years to two.

Taken side by side with any legislation in any other country, this marks a very definite step forward in our social legislation. I am grateful for the reception the Bill has got in both Houses. I look forward to it becoming law as soon as possible.

A good deal of the estimates in the Bill have to be conjectural in so far as it is not possible to estimate the extent to which redundancy payments may have to be made in future. We have gone as far as the present surplus in the fund would justify. Should it be found at any time that there is a continuing surplus in the fund, we can always come back and have further amendments. On the other hand, if it is found that the income to the fund is not sufficient to meet the provisions we have made, there will be no alternative but to increase the contributions. In any event, the distance we have gone to improve the Principal Act in the short time in which it has been in existence is, in itself, a very definite step in the right direction and will characterise any future social legislation.

Question put and agreed to.